If we are really talking about a new category, there are several issues to consider
Will the OEMS be actively entering the market at the same time? If so what will they be producing?
If the OEMS make good to great products at both high and mid level there is little to no reason for Microsoft to make any phones. The primary rational for the Surface line was to demonstrate high end aspirational devices at a time that OEMs were in area to the bottom. (They also pushed pen and Ink again, although other MS divisions, like Office, steadfastly resisted ink. Marketing gat aggressive and showed how well you circle and underline things.)
All, surface devices are aspirational premium devices with good build quality. (By all, I mean some. Surface laptop is no better than many ultra mobiles. It is pretty and fuzzy and Apple like, but not at all aspirational. Inking and pen use are difficult. I guess this filled a gap.)
All surface devices prices have a Surface Surcharge that is added to the appropriate premium price. This surcharge allows OEMS to copy and compete at a better price and still make a profit. (Me gut feeling is that the Surface Surcharge is abut 15-20% on computers and 40-60% on accessories.)
If OEMs are active and coming up with appropriate designs, A flagship "Surface" device will make fans happy, and is a good idea.
If OEMs are sluggish, or making poor devices, MS should make good competitively priced devises that illustrate their vision. These mid-tier competitively priced devices do not live up to Surface brand and will not be successful if they have to include the Surface surcharge. (MS could still do a Surface flagship, but not with out a good mid-tier device to sell to the general market.) I don't care what MS names these mid-tier devices. Lumia still means something outside the USA. I do not think X-Box would be good. I don't think HoloLens would be good. I guess that leaves Outlook, since that seems to be what MS names everything else.